TMI Blog2014 (10) TMI 297X X X X Extracts X X X X X X X X Extracts X X X X ..... was not entitled to claim Cenvat credit for the same. There is no illegality in the order of the Tribunal. This is also clear from the Circular. an assessee is only entitled to claim cenvat credit on service tax paid for the Goods Transportation Agency service provided amount paid was integral part of the price of the goods - the amount paid for the GTA service was not integral part of the price of the goods - Assessee was not entitled to claim cenvat credit of the service tax paid - Decided against assessee. - Tax Case No.34 of 2011 - - - Dated:- 12-3-2014 - Yatindra Singh, CJ Prashant Kumar Mishra, JJ. For the Appellant: Shri Shashank Dubey, Senior Adv. Shri Bhaskar Payasi, Adv. For the Respondent : Shri Maneesh Sharma, Adv. ORDER 1. This tax appeal is against the order dated 04.01.2011 of the Customs, Excise and Service Tax Appellate Tribunal, New Delhi (the Tribunal) partly upholding the order of the Adjudicating Officer (the AO) so far as it reverses the Cenvat credit of service tax paid on Goods Transport Agency Service (the GTA-service) by Lafarge India Limited (the Assessee) for the period from January 2005 to October, 2007. 2. The appeal was ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsel for the parties agree that the first question is the only one question involved in the case and it is the same as we have framed in opening paragraph of the judgement, though it is differently worded. SUBMISSIONS-THE PARTIES 9. The counsel for the Assessee relies on some decisions (see below) and the circular number 97/8/2007-ST dated 23.08.2007 (the Circular) and submits that: - The goods were booked on freight on road (FOR) basis and the ownership of the Assessee continued till the place of destination; - In the facts and circumstances of the case, the GTA-service taken by the Assessee for transporting the goods upto destination is, an input service; and - The Assessee is entitled to claim cenvat credit for the same. 10. The counsel for the Central Excise Department (the Department) submits that: (i) The goods were manufactured in the Assessee's factory. They were transported by the different GTAs to their destination. It is an output service and the Cenvat credit cannot be taken for the same; (ii) In case ownership over the goods continued with the Assessee till destination or it is an input service then the cenvat credit ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not defined, but defined in the Excise Act or the Finance Act shall have the meaning assigned to them in those Acts. 17. Rule 3 of the Cenvat-Rules (see Appendix-ll) explains, when can a manufacturer claim cenvat credit. Rule 3(1)(ix) provides that cenvat credit can be taken for the service tax leviable under section 66 of the Finance Act, which is paid on any input service received by the manufacturer of final product or by the provider of output service. Place of Removal 18. Section 4 of the Act is titled as 'Valuation of excisable goods for purpose of charging of duty of excise'. Though, section 4(3)(c) defines the word 'place of removal' for purpose of that section but in absence of its meaning for other sections, it would be applicable unless it is otherwise provided. 19. In section 4(3)(c), 'Place of removal (see Appendix-III) means-... a depot, premises, ... or any other place ... from where the excisable goods are to be sold after their clearance from the factory.' 20. If under the terms of the contract, the sale takes place at the destination then that place may be the place of removal and service tax paid on the GTA-service for tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y in the goods remained with the seller of the goods till the delivery of the goods in acceptable condition to the purchaser at his door step; - The seller bore the risk of loss of or damage to the goods during transit to the destination; and (iii) The freight charges were an integral part of the price of goods. 27. The decisions cited by the counsel for the Assessee show that so far as transportation of the goods on FOR basis is concerned, the ownership of the goods continues upto the place of destination and this would be treated as an input service. So is the case here and the first two conditions were satisfied. But question is, whether the third condition was satisfied or not. 28. The third condition stipulates that the service tax paid on the transportation up to such place of sale would be admissible only if the assessee establishes that the freight charges were integral part of the price of the goods transported. 29. In the present case, the Tribunal has recorded a finding that the freight charges were not the integral part of the price of the goods so the Circular does not support the submissions of the counsel for the Assessee. CONCLUSIONS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tember, 2004, including the said duties, or tax, or cess paid on any input or input service, as the case may be, used in the manufacture of intermediate products, by a job-worker availing the benefit of exemption specified in the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 214/86-Central Excise, dated the 25th March, 1986, and received by the manufacturer for use in, or in relation to, the manufacture of final product, on or after the 10th day of September, 2004. Explanation - For the removal of doubts it is clarified that the manufacturer of the final products and the provider of output service shall be allowed CENVAT credit of additional duty leviable under section 3 of the Customs Tariff Act on goods falling under heading 9801 of the First Schedule to the Customs Tariff Act. Appendix-III The relevant part of section 4(3)(c) of the Central Excise Act, 1944 is as follows: ... 4. Valuation of excisable goods for purpose of charging of duty of excise.-(1) Where under this Act, the duty of excise is chargeable on any excisable goods with reference to their value, then, on each removal of the goods, such value shall ..... X X X X Extracts X X X X X X X X Extracts X X X X
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